Study Of Procurement Management With Application To Enterprises

As an important aspect of company's operation, purchasing is increasingly acknowledged by big companies. Recently, as purchasing becomes a new consideration of profit making, it was paid much more attention that how to do purchase well.Based on author's experience in practice, some points with respect to buying or purchasing have been focused on in this thesis. They include improvement in purchase function, embodied purchase value, analysis of cost reduction, as well as good timing of purchase. These points are discussed as follow:1. Meaning and function of purchasingAs an activity in company's project operation, purchasing plays key role in company's competitive advantage. It can directly affect operation process and achievements of a company. It plays a significant role in project process by providing a base and basic support. Meanwhile, purchasing cost is always main part of manufacturing cost, and has an important affection on price and competitive advantage of product. Thirdly, purchasing needs a good cash flow and adequate space and instruments. So a qualified purchasing can help to control allocation of funds, to enhance efficiency of instruments and space utilization. In addition, purchasing provides a communication platform for the company and stands for a company's image.(2) Development and new trend of purchasingAccording to purchasing function and its relationship with company strategy, purchasing can be divided into 5 types. With development of purchasing function, there are some new types including○1 Centralized purchasing,○2 International purchasing,○3 Information purchasing,○4 Customer oriented purchasing,○5 Cooperative purchasing.(3) Realization of purchasing value and Analysis of purchasing cost Nowadays, the concept of purchase has been developed greatly. The department of purchase has transformed its single function of purchase goods into purchasing management. Purchase and purchasing management are two different concepts. By considering the factors of risks, capital tie-up, scales, time and cost, through scientific purchasing management, the company can make out the best plan on how to purchase, what to purchase, the amount of each purchase, the frequency of the purchase and the site of the purchase and can keep running with limited fund. These issues are positive to cost reduction, cash flow management and quality increment. Also, buyers pay much attention to use diverse cost analysis methods rather than just focus on price. These analysis methods include total cost, life-cycle costing and so on. Practice proved that they can calculate purchasing cost effectively.(4) This thesis analyses the cost and price of purchasing work, qualitatively and quantitatively. It presents 12 methods for cost reduction, and how to manage the cost of purchase including: how to perform purchase market analysis, how to define the relationship with suppliers, how to organize purchase group to fit variable purchase functions, how to use the Product Life Cycle theory and ABC Management Method to manage the purchasing cost. Practice proved that these new methods and theories are positive to cost reduction in purchase.